Bottle Domains settlement talk scuttled as damages loom

The Australian domain name regulator has ruled out an out-of-court settlement in its spat with Bottle Domains amid speculation that a loss could bankrupt the organisation.

auDA chief Chris Disspain gave iTnews a categoric "no" when asked if the regulator would consider settling the case before it goes to trial on 24th June.

He also said the regulator had a strong enough cash position - some $4.3 million in reserves - to back up a further unfavourable ruling from the Victorian Supreme Court.

auDA has already "lost" three appearances before the Court relating to a temporary injunction that prevented it from stripping Bottle Domains' .au accreditation and forced the regulator to reinstate the registrar.

Disspain did not believe these rulings had backed auDA into a position where an out-of-court settlement was its best option.

The spat - which began over the alleged cover-up of a security breach in 2007 - has escalated into a high-stakes battle between auDA and Bottle Domains, which is owned by Nicholas Bolton's Australian Style Investments.

At stake is a potential multi-million dollar payout to Bottle if the registrar can prove its brand and business was damaged by auDA's decision to axe their accreditation.

"auDA has caused some millions of damage to Bottle - I can confidently say damage to their asset value would be in the millions," said Larry Bloch, chief executive of registrar NetRegistry and an ardent critic of auDA.

"We've seen a very significant influx of [Bottle] reseller customers coming to Netregistry. If that experience is shared by other registrars then I'd imagine it's having a very significant adverse impact on the trading position of Bottle but more importantly on their future prospects as well.

"I'd really call on auDA to wrap up the situation as soon as possible and reduce further damage."

auDA's decision to forge ahead with the case is likely to cause further unrest among registrars.

While most are understandably reticent to speak out publicly against the regulator, many have expressed concerns privately that a sizable ruling against auDA could result in higher .AU domain costs being passed on to them and to buyers to help the regulator recoup its loss.

Bottle remains confident it can win the case, it told iTnews following the most recent court appearance.

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